Google Adwords CPC Inflation – More Money More Money

February 13, 2008

I am not sure if its just me but are the CPC on Google Adwords starting to inflate alot faster than usual? I have been running accounts for clients on multiple verticals and have started to see an increasing trend on CPC inflation. I know Australia is going through inflation but is that directly affecting the online market?

Chances are thate the answer is yes. In short, people are buying more hence more online retailers in multiple verticals are willing to invest more in to marketing their products and services. This is not a bad thing for us, since it means more business, however, sometimes seeing the inflated CPC for the keywords I am trying to bid of is just rediculous.

Ofcourse I am not at liberty to expose to you what keywords I am bidding for and in which vertical, however if you use the Adwords Traffic Estimator, you’ll see the avg. CPC people need to pay for even the most niche topics and long tail keywords. Go ahead, login to your MCC (My Client Center) and check it out if you haven’t noticed the inflation, compare it to just one year ago and you’d be surprised.

For example, insurance keywords used to be on average $3 to $4AUD on generic terms. Now you’d be laughing if you can get $7AUD CPC. Thats practically double the price of what it used to be last year in Australia.

The funniest incident which happened to me would be Google asking me to pay $13AUD CPC for a term which is supposedly trade marked. That has nothing to do with inflation though, its just that Google’s quality score system is whacked sometimes and there is nothing the Adwords Account Managers can do.

Ahh well, I can’t really complain, I own websites which earn me a good living from Adsense, so if anything, inflation in CPC benefits me directly, both as an SEM and as an SEO.